Taiwan’s Foxconn has witnessed a 39% decrease in their quarterly profits, with the reports coming out to be far worse than what analysts had forecasted. The company is in charge of assembling Apple Inc.’s products, with their recent slide in revenue largely caused by the production troubles currently facing Apple’s iPhone X.
The phone which marks the 10th anniversary of the company’s mobile division has given parts supplier a hard time as they struggle to incorporate the new features including facial recognition and edge-to-edge display. The high demand for this phone though which was launched earlier this month is expected to ensure that the slide recorded by Foxconn is overturned in the fourth quarter.
iPhone X’s parent company Apple had forecasted that the phones will experience a strong growth during the holiday season. They further stated that they are happy with the progress made so far in the production of the phone. Analysts, however, stated that the company cannot fully meet the demands for the phone till early next year.
Foxconn which is currently the largest contract electronics manufacturer in the world stated that its Q3 net profit had reduced to $700 million, a figure that is 42% below what was estimated by analysts. This drop is their first this year and it represents their lowest quarterly profit drop for the past eight years. Their revenue though was left unchanged.
Daiwa analyst Kylie Huang stated that “I think in the fourth quarter we expect to see a recovery because utilization will get better given the iPhone ramp-up. So November/December should be better but still will be impacted overall in the fourth quarter.”
There are analysts who believe that the decline in their profit was down to the fact that the Yuan had lost value, and the company’s being idle while they await the launch of iPhone X.
iPhone 8 was on track as the phone began selling in September. The phone though hasn’t been accepted by customers that much due to the anticipation of iPhone X. at the moment, Foxconn is the sole manufacturer for iPhone X. the company carries out much of the production in their facilities in China, with Nomura Securities stating that the company will make around 67% of all iPhones while the remaining will be manufactured by companies such as Taiwan’s Pegatron Corp and Wistron Corp